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PT Fit Redefined, LLC
dba Koko FitClub
Business Plan 2013 -14
Table of Contents
I. Executive Summary ............................................................................................ ...2
Highlights
Objectives
Mission Statement
Keys to Success
II. Description of Business......................................................................................... 4
Company Ownership/Legal Entity
Location
Products and Services
Management
Start-Up/Acquisition Summary
III. Marketing .............................................................................................................. 6
Market Analysis
Market Segmentation
Competition Analysis
Sales Strategy and Implementation
Competitive Edge
SWOT Analysis
IV. Financials Koko projections July 9 2013 150k
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 2
Executive Summary
Company Overview
The National Franchise Koko FitClub, LLC, with 150 locations nationwide, is a brand of personal
training studios that allow franchises to provide premium customized strength utilizing patented
SmarTraining, customized Cardio and customized nutritional plans for annual members at a
cost of ONE MONTH compared to ONE HOUR of traditional personal training.
PT Fit Redefined, LLC, formed December 25, 2010, was the first Franchise Area Developer in
the Austin Market, and is currently operating three successful locations. The first FitClub
location in Austin, Texas opened the doors in August, 2011. Due to tremendous growth and
market acceptance, development plans began for a second FitClub location, which opened the
doors in June, 2012. The second FitClub location is currently on record as the fastest
franchisee to reach 100 members. As of June, 2013 Our Franchise group ranks #4 in the USA.
The company’s rapid growth provided the momentum to develop plans for a third FitClub
location, which opened the doors in November, 2012. PT Fit Redefined, LLC, by operating
three successful locations with 710 total members, is currently generating sustained revenue
due to recurring monthly profit at each of the three FitClub locations.
PT Fit Redefined, LLC, is currently seeking $150,000 for exclusive use in retiring higher interest
debt of $100,000 and marketing of $50,000 to fill all 3 clubs to capacity.
Highlights
• Sustained Profitability for 2013
• Tied for 3rd Place - Koko Franchise Group in USA
• High level employee commitment and performance
• Extremely high Client retention & satisfaction
Objectives
• Obtain $150,000 Equity investment
• $100k retires debt freeing up $5000 month cash flow
• $ 50K marketing increases current clubs to 850 memberships
• Increases monthly revenue to approx. $80,000/MTh by EOY 2013
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 3
Mission Statement
PT Fit Redefined, LLC was established to provide a venue and business opportunity that the
owners could share their passion for fitness to bring about the life changing reality of health &
wellness to their neighbors. Over the last couple of years the business grew and the Company
is now seeking to bolster its existing businesses by running it to full member capacity and
expanding franchisee operations in newer areas of Austin. From the new locations, the
Company seeks to:
• Expand the Company’s brand in the Austin/Travis/Williamson county Market
• Provide a steady year-round opportunity which will facilitate growth
• Provide a substantial return for all investors
Keys to Success
PT Fit Redefined, LLC provides solutions and capitalizes on these opportunities with the
following:
1. Results-With Koko, there's no wasted time. Every workout is designed for maximum
effectiveness and efficiency. That's how Koko delivers the best results in the minimum
time possible. In fact, one 30-minute Koko SmarTraining strength workout delivers the
same benefits of up to 90 minutes of a typical gym workout for most people! And 15-
minutes of Koko Cardio is TWICE as effective as the typical treadmill or elliptical workout.
With Koko, customers see and feel real results every single day. They can see them
online, as each workout is scored for performance.
2. Motivation- By having the ability to track progress, and see how you stack up to others in
the Koko fitness community, you stay motivated to achieve fitness.
3. Customer service- Koko even keeps you motivated and informed about your progress
through monthly statements and progress emails to keep you on track.
4. Instruction- with Koko, whenever someone wants to work out, they simply come in; plug
in the Koko Key into any Koko SmarTrainer and go! We provide step-by-step instruction
along the way. Koko instantly greets the customer by name and guides them through the
program for that day. Just like a private trainer.
5. Variation-Each time a customer comes back, Koko automatically adapts the new session
to all the previous progress. So no two workouts are ever the same. No one gets bored,
everyone stays motivated, and they see real results
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 4
Description of Business
Company Ownership/Legal Entity
PT Fit Redefined, LLC is a Limited Partnership C corporation that is privately owned. Koko Fit is
a franchise of PT Fit Redefined, LLC. SmarTraining is the principal strength and conditioning
program for people of all shapes and sizes, from the highly specialized combat warrior to the
grandmother trying to build enough strength to pick herself up after a fall. This is a fitness
program that is, by design, broad, general and inclusive. We do not specialize. We generalize.
Sports, combat, survival and life reward are just a few of the accomplished goals of our
program. Our program utilizes the ten standards of fitness; cardiovascular/respiratory
endurance, stamina, strength, flexibility, power, speed, coordination, agility, balance and
accuracy.
Location
There is a huge untapped and growing market in the Round Rock, Cedar Park and North West
Austin areas that we intend to target and hence our new franchises will be based out of these
locations. For our new Koko fit franchise operations, we will be occupying roughly 1,400 to
2,000 square feet of retail space.
Products, Services and Pricing
Our Company has developed a 3 unit Koko FitClub franchise network in Austin, TX, which
provides a service that features and offers for sale to the public, membership to a specialty
fitness club with patent-pending fitness equipment, personalized technology and software
programs, which develop individually customized exercise plans for Koko FitClub members,
guides them through their daily workouts and provides them with website tracking of their
exercise activity, along with various merchandising relating to fitness.
PT Fit Redefined LLC has a professional personal training staff. Our personal trainers provide
the knowledge and expertise in designing and implementing a fitness program. Each trainer is
Koko Master certified and has standard first aid and CPR.
We generate revenue by selling month-to-month memberships for $299 per month ($99 per
month for a yearly contract) for unlimited personal training sessions using the patented KOKO
Smart Training system. There is a one-time membership orientation fee of $299.
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 5
Management Summary
Robert D. Reisch, CEO
Robert holds an MA in Philosophy from St. Meinrad University and a BA in Business
Management from The State University of New York. Robert has 25 years of business
experience, both as an entrepreneur as well as an non-entrepreneur. He was co-founder of two
startup companies. InVzn Development Corp, & LegalSpan/Manexa. Founded in 1992, inVzn
developed the first trial presentation system used now in courtrooms across America & Europe.
Legal Span/Manaexa develops online continuing education programs for Attorneys,
Accountants, Bankers and Strength & Conditioning coaches. Robert attributes a large part of
his company’s success to the fitness centers he developed in both companies at inception.
Robert was also the founder of the underground fitness center, a non-profit fitness center for
teens on Martha’s Vineyard, MA. Mr. Reisch has been featured on “The Today Show”, National
Center for State Courts, and “Good Morning America” for his work in technology and business.
Funding and Use of Funds Summary
In order to boost the memberships at each of the existing clubs to 850 members, funds will need
to be secured for marketing. This will also be an additional equity investment sought worth
$50,00.00. An additional $100,000 is required to pay off higher interest debt. Total Equity
investment requested = $150,000.00
Budget for Koko FitClub Build-out, Equipment & Supplies List
Items Costs/club Total/club
Total Costs
Additional Marketing Budget for promoting membership in Clubs#1, #2, #3
$50,000.00
$100,000 debt payoff
$100,000.00
Total Equity investment
$150,000.00
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 6
Marketing
Market Analysis
We are part of the fitness market. Entrepreneur magazine named the fitness category the fifth
hottest franchising trend. This trend has accelerated within the $17.6 billion explosion in the
health and fitness industry. Fitness franchises outpace overall franchising among the 1,500
franchise systems in the United States - there's plenty of market share for everyone. In fact,
health club membership has grown by an average 4.6% annually in the past decade.
Working out at a health club is the #1 sport activity in the United States according to the
National Sporting Goods Association.
• Fitness is a $17.6 billion industry that has doubled in size in the last 10 years.
• There are 42.7 million health club members in the United States.
• The U.S. is home to 23,500 health clubs and the number grows each day!
• Health club memberships nationwide are 48 percent male and 52 percent female.
• The average health club member has an annual income of $76,000.
• The average health club member attends their club 92 days per year.
• Personal training is the most widely used health club programs.
• Cardiovascular equipment is the top area of expansion in U.S. health clubs.
• Even with a flood of publicity and medical research pointing to physical fitness as the
solution; nearly 90% of America has yet to join a gym.
• 50 Million By 2010 - The industry's goal is to have 50 million health club members
nationwide by 2010. Source: International Health, Racquet & Sportsclub Association
(IHRSA) Member Census
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 7
The Austin Market
Economic Growth Potential in Austin- Austin has consistently over the last few years been
voted the best place to work and live in Texas, frequently making the top five and ten lists of
Forbes, Money, and Inc. magazines . This is attributable to factors such as a flourishing private
sector with 6.5% growth in five years, expansion of small businesses by 1% last year, a spurt in
population growth by 18% in five years. It has one of the most educated populations, that is
either self-employed or employed in High-Tech and Services industries. Besides they have a
burgeoning youth and retired population. This demography loosely correlates to earning
potential, or at least indicates a higher average household income and buying capacity.
Therefore, being in Austin, PT Fit Redefined, LLC’s target market is broad enough and we enjoy
significant market opportunity. Despite experiencing solid growth during the past decade (with
the exception of the past two years), the health and fitness clubs market has not yet reached
saturation. As a result, the Gym, Health and Fitness Clubs industry are expected to remain in a
growth phase, with revenue expected to rise at an average annual rate of 2.6% to $28.2 billion
nationally in the five years to 2016, according to IBISWorld, the nation’s largest publisher of
industry research. During this period, demand is expected to improve as the US economy
stabilizes and unemployment declines. According to IBISWorld’s latest report, the Gym, Health
and Fitness Clubs industry in Austin have benefited greatly from the vast array of marketing
campaigns and ensuing consumer trends for fighting obesity and improving health. This trend
has resulted in soaring demand for fitness activities especially among youth and baby boomers,
and industry operators have capitalized on this growth by expanding establishments in both size
and number.
Demographics and market indicators
Population Growth Rate The population in Austin has grown by 37% in the last decade as compared to a national
average growth of 9.7%.
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 8
Growth rates 2010-
2020
2020-
2030
2030-
2040
2040-
2050
Austin MSA 35.30% 32.50% 31.50% 31.80%
Texas 21.80% 22.00% 21.50% 21.60%
Population by Age & Sex Nearly half of the region's population, 43%, is in the peak working years between the ages of
18-44 (compared to 36% nationally). The median age of the Austin metro is more than four
years younger than the national median (32.9 years vs. 37.3 years).
Population by Age & Sex, Austin MSA, 2011
Male Female Total
0-17 229,702 219,273 448,975
18-24 101,785 99,242 201,027
25-44 293,128 280,314 573,442
45-64 203,420 208,121 411,541
65+ 65,641 82,893 148,534
Total 893,676 889,843 1,783,519
Population Distribution by Age, 2011
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 9
Income
The median household income in Austin is $57000 which is higher than the national median
household income. This gives us an advantage to expand our business in a thriving and fortified
economy like Austin.
Income, 2011
Austin MSA Texas United States
Median household income $56,783 $49,392 $50,502
Per capita income 30,093 24,682 26,708
Households by Income Group, 2011
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 10
The Austin Market Segmentation
In Austin, Customers’ top needs include:
1. Results- Customers want to see results when they go to the gym. They lose motivation if
they do not feel or see a change.
2. Instruction- Many people stop going to the gym because they do not know how to
properly use the equipment.
3. Customer service- Customers want to feel recognized and not be intimidated to come to
the gym.
We at PT Fit Redefined, LLC understand this and make the extra endeavor to achieve this. Our
target market is individuals that live/work within a 5-10 mile radius, who are between the ages of
30-60 years old earning a household income of $70,000 per year or more. The latest study
shows that 15% of the population have a gym membership. Koko Fit facilities tend to capture 1-
3% of the population. To run a successful facility, we need at least 1% of 20,000 residents in the
bustling North Austin neighborhood, to generate a sufficient number of members to run
profitable new and old franchises.
• Weekend Warriors: an important market segment for Koko fitness will be the weekend
warriors. These people don't like to be locked into long-term commitments but like the
freedom to come and go when the opportunity presents itself. These people will be a
target market for special promotions and periodic activities.
• Hardcore Fitness Buffs: another market segment for our facility will be those who view
themselves as dedicated fitness gurus/athletes. These people are very particular about
the type of workout equipment they use, and usually enjoy the opportunity to be "looked
at" by other users of the facility. As long as the right equipment is available, these people
are willing to lock into long-term commitments with a facility.
• Gym Rats: a third market segment for Koko fitness clubs will be those people who love
to be in a gym. Usually associated with basketball, gym rats seek to find places to play,
practice, or just hang out, usually at a very reasonable price. The better the atmosphere
and the more people to watch them, the more gym rats are attracted to a facility. This is
a very large market for us.
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 11
The Austin Market Segmentation
• Families: this is a smaller, but important market segment for our facility. We have
"something for everyone" and that will attract families that want to become members of
the facility as well as families who simply want a few hours of fun every now and again.
These people will also be the main target for summer camps and activities that allow for
fun and education for the children while the parents enjoy some relatively cheap
babysitting.
• Senior Citizens: this market segment will be our fastest growing market as more senior
citizens are retiring to Austin than any other group. When provided with health promoting
programs, senior citizens are willing to participate due to the new focus on physical
activity and the constant encouragement from family and physicians. In fact, this group
was the fastest growing club membership segment over the last 10 years according in
the Texas. It grew up to four times faster than other segments.
• Tourists: another small market segment for Koko fitness will be the tourists who are
attracted to the facility because of its size and appearance. Fabric structures often
become tourist attractions because of their different and interesting appearance.
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 12
The SWOT Analysis
Analysis of Strengths, Weaknesses, Opportunities, and Threats for Koko Fitness Club and their
two major competitors:
Koko Fitness Club Big Box Centers
Personal Training
Studios
Strengths
Competitive rates Well known- Have a
strong reputation
High quality Facility with
new/large selection of
equipment, good results
Personable
Atmosphere
A lot of equipment,
low costs
Kids center with
computers
Manufacture own
equipment
Many Locations, no
scheduling issues
Personal attention,
highly motivational
Have a strong
understanding of
equipment
They have a variety
of classes offered
Good hours- convenient
for those working out at
different hours
Classes offered at a
variety of times Informative website
Weaknesses Small and unknown
Crowded, may scare
away beginners
Not many different
classes offered
Difficult to find
location- and only one
location
Impersonal
atmosphere
Classes are not offered
at convenient times
Hours are less
convenient
May be intimidating
to beginners
Commute time
May be intimidating to
beginners
Prohibitive costs
Out of date website
Smaller staff
Opportunities There is room to
grow and increase
Offer discounts to
employees of certain
Good location
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 13
the company and its
reputation
companies
To expand the
number of facilities
Could take advantage
of location within
North Austin and
surrounds with high-
tech corporations and
communities
People are getting
used to have gym
and health clubs in
their daily routine of
life.
A large segment of
market is still
untapped, low income
area will be of special
focus for Koko
Fitness which is
totally ignored by the
rivals.
Appeals to beginners-
may bring in new
customers
Threats There are a lot of
strong competitors
There is only one
location- many not willing
to travel for a workout
Current advertising is
not sufficient
Reputation may be
bad
It is getting older,
facilities may become
dated
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 14
Marketing & Promotion Strategy
PT Fit Redefined, LLC will utilize a variety of the modern marketing methods that will collectively
make up the company’s marketing strategy. A budget of $50,000 has been earmarked for
marketing the existing clubs. The great thing about marketing Koko Fitness clubs ( existing and
new ones), is that each market segment relates, in certain ways, to all the others.
Our main objective with our marketing strategy will be to get people into our new facility. Once
people see what we have to offer, and feel the atmosphere, they will want to return and
participate in the many activities and programs that will be available to them.
Some of the ways to increase new memberships in the existing clubs and to get people into the
facility include:
1. Offering tours to junior colleges, universities and senior high schools of the facility.
2. Radio and Newspapers-Advertise on 100.3 and 98.7, which are popular radio stations among
the target population. Having a large promotional event in the facility with a DJ advertising the
company’s programs and offerings in a morning show and which will be free to everyone in the
facility. Promote the facility in local newspapers and popular health magazines
3. Hosting and supporting various community and charity events that will bring in many people
who otherwise would not come.
4. Mailing out free day passes and sponsoring local sports events in the surrounding areas in
North Austin/ Cedar Park/ Round Rock.
5. Direct Mail- We take out pinpointed Direct Mail campaigns such as postcards directed to a 30-
60 YEAR OLD demographic. The postcard will also contain pricing, the packages offered at
Koko fitness, the location, a free tour, and the first class equipment that we have in our facility.
6. Vehicles- We Have KOKO fit wrap on owners’ vehicles with the message to follow the vehicle to
KOKO
7. Flyers, business cards, brochures- We distribute brochures, flyers and business cards to our
contacts and potential clients. We will have a Free strength and condition analysis flyer that will
be distributed to all local businesses within a 3-mile radius.
8. To measure current customer satisfaction, we will have a five question survey done half yearly.
The survey will be given to current members on a gym visit. The survey will include questions
about the instructors, the facility, and the service. It will allow the customer to rate these items
on a scale of 1 to 5. It will be based on an overall score. The president and manager of Koko
fitness will review and calculate the results of this survey.
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 15
9. Have a suggestion box in the gym that customers can put ideas in. Also put a suggestion box
online that website visitors can enter suggestions into.
10. Have longer hours of operation of gyms and invest in more cleaning staff to maintain the
property and equipment. Also, enhance the image of the clubs by replacing the current signage
with a more aesthetically pleasing and a larger one.
11. Networking- We have a great working relationship with local businesses who are able to provide
us with referrals each year.
12. Website- Up to date and professionally maintained. Our website allows prospective customers
to see our products and services and find our location. We intend to form an online community
of existing members through our blogs and use this tool to attract new members as well
13. Social Media- With the advent of Facebook, You TUBE, Twitter, and the likes, we have a
comprehensive campaign to market ourselves through these channels. We promote social word
of mouth by having contests using the proprietary KOKO fit score amongst members. Clients
are offered incentives to post their KOKO fit score on their Facebook pages. We have member
videos showing how to and how fun on YOUTUBE. We have local merchant owner KOKO fit
contests posted on their business pages.
14. Word of Mouth- Our reputation with our existing clientele brings in many new customers through
word-of-mouth referrals.
Sales Strategy and Implementation
Competitive Edge
While each of our competitor companies possesses several strengths and has been able to
establish itself as a legitimate competitor in the marketplace, PT Fit Redefined, LLC maintains
several competitive advantages over these companies. People buy our services because we
capitalize on every flaw a "global gym" has to offer. Koko Fit offers real one-on-one coaching
each and every time a person comes into the facility at a fraction of the cost of a "global
gym". Most gyms offer personal training for $50-$100 a session. Our gym charges $99 per
month for unlimited sessions. Our facility creates workouts that compound full body
movements. These workouts are fun, very intense and can be scaled to all ages and
experience levels. The typical "global gym" caters to the bodybuilder types that have no
functionality to what life can throw at you. Our gym doesn't use expensive, useless machines
that isolate each muscle, thereby creating uneven muscle balance. Koko Fit gives each
individual an opportunity to lose weight, gain muscle mass and regain the agility and balance
once enjoyed a child.
PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013 16
The competitive advantages that we offer that set us apart are:
1. Product- Koko FitClub is the exclusive franchisor of the revolutionary Koko SmarTraining
System. This proprietary technology separates Koko FitClub from all others.
2. Unlimited personal training- SmarTraining enables PT Fit Redefined, LLC to offer their
members unlimited personal training each month -- at a price that's lower than what
other clubs charge for just one session!
3. Club design- KOKO’s club design sets them apart as well; a sleek, studio-sized space of
just 1,800 square feet that exclusively features Koko's state-of-the-art SmartTraining
equipment.
4. Pricing- We offer personal training, state of the art technology, no staffing problems, and
tons more at a convenient, affordable price.
Financial Analysis
PT Fit redefined LLC will acquire 150 new customers in existing clubs by EOY 2013,
• $100k retires debt freeing up $5000 month cash flow
• $ 50K marketing increases current clubs to 850 memberships
• Increases monthly revenue to approx. $80,000/MTh by EOY 2013
Recurring revenue is a critical part of the business model. The new clubs will be cash flow
positive in the first year. Please see financial projections attached.